Econintersect: Every day our editors collect the most interesting things they find from around the internet and present a summary "reading list" which will include very brief summaries (and sometimes longer ones) of why each item has gotten our attention. Suggestions from readers for "reading list" items are gratefully reviewed, although sometimes space limits the number included.
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Articles about events, conflicts and disease around the world
When the End of Human Civilization Is Your Day Job (Esquire) Among many climate scientists, gloom has set in. Things are worse than we think, but they can't really talk about it. Observations by scientists indicate one of the nightmare long-shot climate scenarios might be happening: a feedback loop where warming seas release methane that causes warming that releases more methane that causes more warming, on and on until the planet is incompatible with human life. But equivocation in the face of probabilities is preventing the catastrophic possibility from getting enough attention. While policies focus on most probable projections what if one of the "fat tail" probabilities gob-smacks civilization "upside the head"?
The EU wants to pay off a brutal dictatorship to help it solve its African refugee problem (Quartz) Despite its small size and relative isolation, Eritrea has accounted for the second-largest number of migrants to Europe last year and so far this year—trailing only Syria. In an attempt to stem the flow, the EU is boosting its aid to Eritrea. It says the money is meant to help tackle poverty and create jobs. But the real cause of Eritrea’s exodus has very little to do with lack of economic opportunities. Its people have for years been fleeing a repressive military dictatorship that forcibly conscripts young men for indefinite periods and treats prisoners like animals.
The prospect of a Grexit: Devaluation wouldn’t be a panacea for Greece’s economic woes (Brookings Institution) Grexit is not a solution. First, while devaluation may lead to a short-term boost in exports driven by a cheaper local currency, the devaluation does not assure a productivity increase among Greek firms. Higher inflation will, ultimately, whittle away the gains. Competitiveness driven by productivity growth—not currency devaluation—is what actually stands behind long-term, sustainable growth. Second, and perhaps more importantly, Greece’s current productive structure does not allow it to quickly expand its export basket.
There was no-one else but Varoufakis talking straight. Schäuble has said "How much money do you want [in order] to leave the euro?" He doesn't want Greece in the euro at all. He was the first to raise the issue of a Grexit back in 2011.
We went to a war thinking we had the same weapons as them. We have underestimated their power […] It's a power that enters the very fabric of society, the way people think. It controls and blackmails. We have very few levers. The European edifice is already Kafkaesque.
Sunday’s EU Summit will be deciding between kicking Greece out of the Eurozone now or keeping it in for a little while longer, in a state of deepening destitution, until it leaves some time in the future. The question is: Why is the German finance Minister, Dr Wolfgang Schäuble, resisting a sensible, mild, mutually beneficial debt restructure?
Be as creative and daring in helping others as you are in business (Quartz) The new Corporate Social Responsibility (CSR) Act now requires all large Indian companies to donate 2% of their net profits to philanthropic causes. This is expected to generate philanthropy to the extent of about $3 billion annually, but that is only a drop in th bucket compared to the country’s human infrastructure, education and healthcare problems. McKinsey research indicates that corporate foundations might be more effective if they focused on “niche issues” such as the rehabilitation of criminals or the promotion of sports. But corporations are looking for issues with bigger public relations profiles and, with the absence of credible and efficient organizations to support the risk is that much of the philanthropy may be wasted.
Among ingredients needed for faster growth? Greater appetite for risk. (Brookings Institution) Without risk-taking, we are unlikely to see the kinds of major new innovations that will propel our economy toward a higher growth trajectory. And growth has been weak for an economic recovery. See graph below. Two recent essays define this challenge. One is a thoughtful piece by Bloomberg View’s Barry Ritholtz on the decline in publicly traded companies in the U.S., from a peak of more than 7,300 in 1996 to just 3,700 in 2014. After surveying multiple possible causes for the nearly 50% decline–including the much-criticized Sarbanes-Oxley Act, which tightened public company reporting rules–Mr. Ritholtz cites academic research showing that mergers have played an outsize role in reducing the number of public companies. And a smaller number of companies is related to reduced risk taking (less competition). The other piece is an essay by Fortune editor Alan Murraysummarizing the results of the latest Fortune 500 rankings. He reports that revenues of the Fortune 500 companies combined equal 71.9% of U.S. gross domestic product, or more than twice the 35% it totaled in 1955. Same conclusion as the Ritholtz dscussion.
Other Economics and Business Items of Note and Miscellanea
Lyme disease is spreading faster than ever and humans are partly to blame (Quartz) Each year, 300,000 US residents contract Lyme, estimates the US Centers for Disease Control (CDC). And given how inconsistently the condition is diagnosed and reported, it could be far more—as many as 3 million cases a year, says Keith Clay, professor of biology at Indiana University. The official number of new US cases—the only available proxy for overall cases—has been growing at double-digit rates. Econintersect: We believe Lyme disease is possibly the most under-diagnosed affliction in those regions where the black-legged tick is endemic. This is for two reasons: (1) The tolerance to the spirochete causing Lyme disease is probably variable so many infected have minor symptoms that can persist for a long time without complaints that might lead to diagnosis; (2) Many doctors fail to correctly diagnose Lyme disease.
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